End of an Era for PDI as DreamWorks Animation Closes Studio

End of Era PDI DreamWorks Animation

Facility could have used a hit like Oscar-nominated and Golden Globe winner 'How to Train Your Dragon 2'

It’s a bittersweet moment to be at PDI/DreamWorks.

Just after celebrating DWA’s Golden Globe win and an Oscar nomination for “How to Train Your Dragon 2,” the Redwood City, Calif.-based animation studio that DreamWorks Animation acquired in 2000 is being shut down as part of a major reorganization by its parent company after a string of box office disappointments have taken a creative and financial toll.

PDI, which was founded by Carl Rosendahl in 1980 as Pacific Data Images, started as a visual effects studio, producing computer-generated graphics for broadcast networks, TV shows and commercials before working on films such as “Batman Forever,” “The Arrival,” “Terminator 2,” “Toys” and “Angels in the Outfield.”

It later expanded into feature animation, with its first DWA collaboration, 1998’s “Antz,” launching Katzenberg’s toon studio. “Shrek” soon followed in 2001, also produced by PDI, which went on to win the Oscar for best animated feature in 2002.

DreamWorks acquired a 40% stake in PDI in 1996, to produce animated films, and the rest of the firm in 2000 for an undisclosed price, renaming it PDI/DreamWorks.

After hits like “Shrek” and “Madagascar 3,” it stumbled more recently with “Mr. Peabody & Sherman” and “The Penguins of Madagascar.” Both have led to significant losses for DWA.

While it did some work on the “How to Train Your Dragon” franchise, it wasn’t the lead animation house on the films, including last year’s sequel directed by Dean DeBlois. The film, whose production largely took place at DWA’s Glendale campus, made history for DWA this month, becoming the company’s first toon to win the Globe for best animated feature, after six previous nominations, and is now considered a frontrunner for the Oscar in the same category.

Instead, PDI will mostly be left with two misfires as a last hurrah for a company that is about to lose half of its workforce of 450 employees. Some of the remaining staff will be offered positions at DWA’s Glendale studio.

The facility is expected to shutter at the end of the year as part of an effort to save DWA $30 million in 2015, and $60 million by 2017.

DWA is slashing over 500 jobs at its studio overall, primarily on the film side, representing 18% of the company’s workforce.

“The No. 1 priority for DreamWorks Animation’s core film business is to deliver consistent creative and financial success,” Katzenberg said. “I am confident that this strategic plan will deliver great films, better box office results and growing profitability across our complementary businesses.”

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  1. John says:

    Well this leaves only 1 studio for Dreamworks left in the US. More work leaving the country. Only the pre-vis work is done out of the NY studio now and the bulk of the work will be done by foreign workers in other countries. I’m complaining but it directly affects me since I’m an American born animator, but this again has bigger meaning for the American economy than just a simple movie studio closing it’s doors. It is the sign of the times. It’s sad really. I’m looking at this as more than just a Movie company closing one of its studios. I see this as another American company not keeping Americans employed to go over seas for cheaper (free) labor.

    • Junipero S says:

      Bold decision by a smart pair of women, congrats. I read all the comments below, what a bunch of whiners and sore losers.. you were lucky your free lunch lasted this long. Like one of the posters replied, “cult” is a one word description, so fitting.

  2. Daniel says:

    Katzenburg should go down with the ship. He has no sense of good stories, at all.

  3. geyser says:

    It will be interesting to see if increased overseas production will hurt these movies. I think you can already see a dip in quality of visual fx. That new Terminator somehow looks worse than T2.

  4. Marty S. says:

    Sloppy reporting Variety!!! PDI, LLC was a separate company that operated as a service provider for DreamWorks Animation. PDI never had a majority role in the decision-making process of which film was produced and which studio. Another sad day for the industry, once again around Oscar time. And Randall Starr Stinson, YES people give a shit! I do!! The very artists that help put DreamWorks Animation on the map as a major player (basically everyone at PDI) were held accountable for the poor decisions being made at the “parent” company.

  5. Roger Baxter says:

    Pity that “Home” looks to be one of their last hurrahs. I mean…yikes!

  6. Dw Dunphy says:

    When you subsist on a sugar-rush junk food diet of sequels, you die a premature death. It’s a lesson that Disney will have to learn very soon.

    • geyser says:

      Look at the top ten grossing movies if the last several years and then get back to me. Everyone complains about sequels, but everyone still watches them.

  7. Mizzr Tigodd says:

    PDI was nothing but a pain in the butt for DWA from Day One (of getting purchased by DWA). Pompous arrogant PDI people pushing their outdated POS software as State of the Art on to DWA, talking JK into devolving into the Stone Age. Ludicrous. POS.v2 is not “next gen” (guess it is next-gen-POS, relatively speaking). History lesson: DWA started with a clean slate, with no past baggage – then they acquired PDI (Big Mistake), and got swindled into being thrown back into antiquated 80s junk “pipeline”. Result: instant crapola baggage!! If DWA had maintained and advanced their modern pipeline, the movies, regardless of good/bad stories, would have cost MANY MANY millions LESS. Too bad this bold decision didn’t come very many years back.

    Don’t let the door swat you on your collective butts as you butt out (like you should have done over a decade back) :)

    • Dub says:

      Wow, troll.

      I will predict this is the beginning of the end for DreamWorks. Looking at the slate ahead, all movies are all going to flop and the fate of Dreamworks may as well become an outsourced movie animation company and/or relying on Netflix TV to buy our shows. And whose fault is it? None other than JK. He was clouded by huge ambitions, yes men, and having way too high of a financial expectation for his movies. Instead of dicking around with new business ventures, he should have kept his focus on the movies and developing better stories that parallel or surpass Pixar. But really, why in the hell would you make a movie about a racing snail. Who the hell would have thought that would make a huge profit. Waste of damn time and money.

      I’ll agree with you there about our software being un-nextgen, but you’re wrong if you think this is PDI’s fault. Software is developed at BOTH campuses, you ignorant F. DreamWorks and JK led to the company’s failure, and you are a heartless person if you believe that PDI was solely responsible. The stories were developed in Glendale and they screwed it all up. No one was watching the movies because it was not up to hype.

      Also, it’s public knowledge that JK received $13 million in salary last year. He could have saved PDI on his salary alone.

      Screw you and go suck a bag of dicks, whoever you are.

      • Lor Ungizam says:

        Hey Dubstep, software was written on “BOTH” campuses because the PDI head-up-their-asses turds LIED to DWA and pawned off their aging, brittle, dusty POS crap as world-class. Sadly, JK ate it all up, and made DWA *switch over* to the pile of PDI poop as the “toolset” for the entire outfit. THAT is what was, and is, the poop-filled FOUNDATION that is still being used and being built-on at “BOTH” campuses. You are a brain-washed, arrogant, ignorant piece of little PDI feces, whoever you are. Go bury your face in your decades-old “next gen” turd pile.

    • Steve says:

      You obviously know nothing about what your talking about. Dreamworks had NO pipeline for CGI before PDI. And since being acquired PDI has been the technology hub of the company. The number of sci-tech awards and patents for CGI innovation to come out of PDI in the past decade is huge. Almost all next-gen tech innitiatives were based or contributed to by the studio.

      That’s besides the point though. PDI and DWA have always been one company. There has been no film for the past 5 years that wasn’t worked on jointly between each studio. It comes down to the fact that Dreamworks can’t support the 3 films a year it wanted to and now with a studio in India and China there are just too many bodies around.

      Regardless, dropping PDI won’t make Dreamworks any better. Films are not better or worse because they are made by DW, PDI, India, or China. It comes down to the executives who greenlight films or don’t, and their directors who either polish turds or craft masterpieces.

      • geyser says:

        Obviously you guys are obviously oblivious, obviously ;)

      • tizz says:

        Really anyone who thinks the Shark Tale pipeline was something to brag about doesn’t understand much about feature animation or technology. I worked on that movie, and it was not a great experience. “Teller” clearly has an axe to grind for some reason.
        PDI’s technology was always state of the art, though it was very opinionated so I’m not surprised it rubbed some people the wrong way. I’ve heard it’s fallen off in the past few years though.

      • Teller says:

        You obviously are another brainwashed PDI loudmouth. DW made Shark Tale, a ‘3D’ film (you might want to look up that term and also watch that movie), it was done with zero interference from PDI, and using third-party programs plus in- house plugins etc. Your self-congratulatory patents and SciTech awards are worthless, as are your “tools”. The movies look awesome because of the talented artists that create their magic, in spite of being handed Neanderthal ‘tools’. Give it a rest.

    • tizz says:

      DWA barely even made 3d films before they aquired PDI. Their entire success in CG is based on assimilating all of PDI’s accumulated technical knowledge. I’ve worked at a lot of studios and I still think the PDI pipeline from the early 2000s is the best I’ve ever worked with.

      Also this article is incredibly badly reported. The author clearly has no knowledge of how Dreamworks was structured. PDI and Dreamworks were one studio, with artists from both studios working on all movies. Sure, movies would be headquartered in one place or another, but the stories and approval all came from Glendale in recent years (PDI created Antz, Shrek and Madagascar in-house though).

      • Mihalin Untecker says:

        Tizzzzzzzzzzzzzz.. Dude or dudette, I don’t know about the rest, but I, Mihalin Untecker, am not the other(s), and, I stand by my observations. Calling someone a ‘troll’ does not make the issues fade away. If that is the attitude of PDI people, DWA is going to be in a better shape than I’d thought.

      • tizz says:

        Im guessing Mihalin Untecker, Wig Minsen, Lor Ungizam and Mizzr Tigodd are all the same troll with a big axe to grind. Really dude, if yours is the attitude of people down at DWA, the company is in worse hands than I thought. It doesnt have long to live I think.

      • Teller says:

        You sound like a PDI minion. Nice try, no dice. If you think the PDI pipeline is one of the best, you have no clue at all about the state of the art. It is people like you with their predictably arrogant, supercilious, NIMBY attitude and technical ignorance coupled with cult-mindedness mixed with undeserved hubris that make up PDI’s ‘tech’ ‘elite’. Puke.

        Finally, Glendale was able to see the truth, and stopped the bleeding. Long overdue. You should be ashamed of yourselves, and get a life and a clear look at the rest of the world. You might even learn a thing or two if you do!

  8. Dreamworks should just make Glatiator II. These animation films cost a bundle and there can only be a couple animated feature winners a year. The entire model is a sinker, unless you sign a key property. They should do ONE a year, and get smart. I think this is all Shrek’s fault. Personally, I’ve never seen a Shrek and never will, so it all seems pretty dumb to me with the hit absent.

    • notjk says:

      Sorry, meant to reply to Teller.

    • notjk says:

      If you truly think the slate of Dreamworks movies will save the company, your head is in the clouds. But have a heart and be sympathetic, why don’t you. Or go kill some animals. Because that seems more likely you POS.

    • D. Warren says:

      It’s Shrek’s fault … but you’ve never seen one and never will. So you are basing this on? Oh yeah, nothing. You don’t come across as particularly bright … just particularly whiny.

  9. Does anyone actually give a shit? Life of Pi exposed a lot of the problems with VFX houses and their business model. Shouldn’t studios create in-house divisions and not start and kill companies constantly?!?!

  10. Ryan M. says:

    Actually PDI did a significant percentage of the work on How to Train Your Dragon and its sequel as well as the bulk of the work on the feature-quality Dragons Christmas special Gift of the Night Fury.

  11. Steve says:

    Tons of people at PDI worked on How to Train your Dragon (1 and 2), myself included. I worked at PDI for 7 years before leaving a few months ago to go back to school. I think Dreamworks is making a real mistake here shutting down the studio that has been the backbone of their technical achievements. The way in which is was done is also regrettable. You cannot blame Duds like Peabody and Sherman on PDI because we had no choice of what films we were going to make. I find Katzenburg’s comment ironic because shutting the studio down will do nothing to improve Dreamworks films.

    It all comes down to money in the end. Why isn’t Dreamworks shutting down the studio in India? Why are they building another studio in China? bottom line is that India is cheaper. As for China, it is a very closed market to most US films, but now it is open to Dreamworks. China is the most populous country on the globe. It’s a no-brainer. Katzenburg knows how to make money. He thinks he knows how to run a great company, but in that he is failing. Dreamworks has been on the decline since 2010 as far as a place to work.

    • To answer your question: Chinese and Indian graduates in the same programs and expertise work for less. Period. Stop thinking you’re so special because you work with top programs. Are you or the tech the star? Then you SHOULD be fired. VFX houses overcharge since they’re unsure of their futures. It’s all bullshit.

      • Wig Minsen says:

        Steve, Stevie.. a tool is not a tool is not a tool. A six-axis milling machine and a primitive rock are both tools, just like REAL modern pipelines and PDI’s software are. Apples, rotten oranges. Nice try, equating them. True that PDI’s “tools” work with RAW NUMBERS, while the rest of the world has long moved on to these things called GUIs, you might want to take a lot and get some education and a big slap in the face. You, your “software” and arrogant attitude are oh-so-80s, and IRRELEVANT.

        DW will not regret getting rid of PDI anymore than you will regret getting rid of your cancer. Now that it is OUT, true healing can BEGIN.

      • Mihalin Untecker says:

        Randall, right on.. Actually, PDI does *not* work with “special programs”, they continue to play up their 80s POS “tools” as state-of-the-art, and polish the turd to call it “next gen”. And, guess what, Kung Fu Panda 3 is being done in China, WITHOUT using said turd POS “software” (my a$$). DWA needs PDI’s “tools” and “pipeline” like you need a hole in your head. THAT is why PDI got s***-canned, not India or China. Don’t need you anymore, “pals”. Sayanora.

      • Steve says:

        A hammer is just a hammer unless you know how to use it. The tech is just numbers unless you have people skilled enough to wield them. The people at PDI are special, which is why DW will hand pick those it absolutely can’t lose and bring them to Glendale. I can tell you right now though that by severing PDI, dreamworks will lose something they don’t know they had. There is more to a company than its products or tech, and it’s something that you cant buy. The history and community that is being shut down is what is regrettable.

        You keep comparing this to VFX which it is not, Dreamworks doesn’t seek employment from vendors. In feature animation you make your own films not someone else’s. Your selling a product instead of being a service.

        The problem with Dreamworks is that they were trying to sell too much product when nobody was buying. There’s too much saturation in the marketplace. From a business standpoint cutting back made perfect sense.

  12. sjkalyan says:

    This is absurd. The only reason PDI shut down is because DreamWorks could not balance their books. The creative standards have no role to play… it is just financial. And the mention of ‘Could have used a Dragon2’ is bizarre, because it is one single entity… a product of DreamWorks.

    Bottom line… DreamWorks had to get money or pluck its own eyeball, and it ended up plucking one of not two, but three, that hurts the least — in terms of finances.

  13. Melanie Cordan says:

    Sloppy reporting. Do your homework Variety!!! Not only did PDI work on both Dragon Movies of the franchise but there was key artistic and technical contribution.

  14. Chris Etrata says:

    PDI wasn’t credited for the how to train your dragon films.

    • Will Acreman says:

      PDI didn’t, doesn’t, and shouldn’t deserve any credit for anything (well, actually, they should be credited for using crappy software to create crappy “films”).

    • ND says:

      if anything they should be discredited.i have worked at cg places in almost all continents, and therefore can say that there is no bag of uglier, programmer-centric, unfriendly set of programs out there. pdi is a reality denying cult.

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